Joe Biden

Senate Committee Votes to Advance Major Tech Antitrust Bill

Susan Walsh | Pool | Reuters
  • The Senate Judiciary Committee voted 16-6 on a bipartisan basis Thursday to advance a major tech competition bill.
  • Some experts consider the American Innovation and Choice Online Act legislators' best shot at making substantial reform to laws that govern Big Tech.
  • If passed, the bill would have significant implications for Amazon, Apple and Google in particular.

The Senate Judiciary Committee voted 16-6 Thursday to advance a major tech competition bill, which some experts consider legislators' best shot at making substantial reform to laws that govern the industry.

The American Innovation and Choice Online Act passed in a bipartisan manner, setting it on a path to potentially be adopted by the full Senate.

Five Republicans did vote with the Democrats to advance the bill out of the committee: Sen. Chuck Grassley, R-Iowa, the ranking member and co-sponsor alongside antitrust subcommittee Chair Amy Klobuchar, D-Minn., Sens. Lindsey Graham, R-S.C., Ted Cruz, R-Texas, Josh Hawley, R-Mo. and John Kennedy, R-La.

The committee's House counterpart has advanced a similar bill and the Senate action could spur a further move on that front. While the White House has not yet weighed in on whether it will support this particular legislation, it has generally supported efforts to increase competition and President Joe Biden has installed progressive leaders at the antitrust agencies.

The bill has significant implications for Amazon, Apple and Google in particular, though as it's currently written it would also apply to other large platforms like Facebook-owner Meta and TikTok.

The bill prohibits dominant platforms, defined by criteria including how many users they have and their market cap, from discriminating against other businesses that rely on its services, in what's sometimes referred to as self-preferencing.

That means, for example, Amazon could not simply decide to list its own private label products higher in its search ranking than third-party rivals' listings. And, similarly, Apple and Google could not unfairly rank their own apps higher than rivals in their own mobile app stores. The same principle would apply to results from Google's general search engine.

Senators offered over 100 amendments to the bill by the start of Thursday's markup, but only a handful were debated, as Klobuchar urged efficiency and promised to continue working on lingering concerns.

Only one of the amendments debated Thursday was adopted, with a change suggested by Klobuchar and Grassley. The amendment, introduced by Sen. John Cornyn, R-Texas, was intended to make it more difficult for foreign adversaries like China to access American user data based on the bill's requirement for dominant platforms to allow other services to interoperate with them.

Klobuchar expressed concerns that the initial language in the amendment would give tech platforms more room to get out of liability under the statute. That change narrowed Cornyn's language to expressly cover data transfers to the People's Republic of China or governments of other adversaries and companies controlled by them.

Still, some senators noted that it would still be worth discussing more amendments after Thursday, though they conceded to move along to a vote. Some who voted in favor of the bill said they hoped to see more changes to gain their approval in a floor vote.

The markup lasted notably less time than that of the House's summer marathon, a nearly daylong session which considered six total bills. Thursday's Senate markup took just about three hours of discussion on the single bill.

Several senators on both sides of the aisle lamented the relatively short time the bill took from introduction to markup and took issue with the fact that the legislation alone did not receive a full hearing before the Senate Judiciary Committee.

Klobuchar shot back that she and Grassley had spoken with dozens of stakeholders about the legislation, engaged with many lawmakers and their staff and discussed the bill in antitrust subcommittee hearings relevant to its contents.

Two California Democrats, Sens. Dianne Feinstein and Alex Padilla, ultimately voted in favor of advancing the bill, after first expressing some opposition. Both voiced concerns that the bill seems to target firms headquartered in their home state, though Klobuchar made clear the bill purposefully defines covered platforms in a way that means those liable under the statute could change over time.

The bill's path to approval by the full Senate is still murky and relies on leadership making time for it among many other legislative priorities. But Thursday's vote is a promising step for those hoping to see reforms, including Big Tech rivals like Yelp and Sonos, which met with White House officials about barriers to competition in the industry on Wednesday.

Meanwhile, Big Tech platforms are mounting massive lobbying and PR campaigns as a measure of how seriously they are taking the threat of the bill's passage. For example, Cruz, who voted to advance the bill, said at Thursday's markup that he had a 40-minute phone call with Apple CEO Tim Cook to discuss the topic.

Cruz said Cook raised the concern that the bill could make it harder for Apple to let consumers opt out of monitoring from apps. But Cruz said he doesn't interpret the bill would have that effect. Apple declined to comment on the call.

Industry groups decried the bill's advancement Thursday while reform activist organizations cheered it.

"We heard enough reservations from senators to make clear that this legislation is not ready for the Senate floor," said Adam Kovacevich, CEO of tech-funded Chamber of Progress, in a statement following the vote. "The problems that Democrats are raising aren't just tweaks – they are fundamental issues with how the bill could impact consumers, competitiveness and security."

"Despite millions of lobbying dollars by monopolists spent to influence lawmakers, a bipartisan group of senators just stated with a clear voice that Big Tech is too powerful," Sarah Miller, executive director of the American Economic Liberties Project, said in a statement.

Subscribe to CNBC on YouTube.

WATCH: How US antitrust law works, and what it means for Big Tech

Copyright CNBC
Contact Us